Bihar seeks Centre’s help to promote trade with Nepal to offset revenue loss caused by prohibition

The landlocked state suffered a revenue loss of Rs. 5000 crore during 2017-18 due to liquor and sand mining ban

Bihar incurred a revenue loss to the tune of Rs 4000 crore in 2017-18 due to liquor ban imposed in 2016. (HT File Photo )

Bihar government has sought the Centre’s help to chalk out an export strategy to promote the landlocked state’s trade with Nepal in a bid to offset revenue losses it incurred due to liquor ban and slump in taxes from sand mining activities.

A demand to this effect was made by the state to the Centre last month during the meeting of the Council for Trade Development and Promotion (CTDP), which was held under the auspices of the ministry of commerce.

Principal secretary of the state industries department S Siddharth said Bihar had pleaded for formation of an inter-ministerial panel to examine import requirement of Nepal and arranging support mechanism for local traders willing to export to the neighbouring country.

“Being a landlocked state, Bihar has little option to exploit the trade possibilities with other countries without the Centre’s assistance. In the last meeting of the CTDP, we had asked for the Central government’s assistance in this regard, but nothing tangible has come out so far,” added Siddharth.

Though manufactured goods worth Rs 30,000 crore are exported annually to Nepal via customs check-posts located in Bihar, the state has a minuscule share in it.

“This is mainly because industrialists from the state do not have the details of importers and the list of articles, which Nepal is importing from other countries,” said Ram Lall Khaitan, president of Bihar Industries association.

President of Bihar Chamber of Commerce and Industries PK Agrawal supported the state government’s initiative and said such strategy would encourage entrepreneurs to set up manufacturing units in Bihar.

“As the state does not have major industrial units to rely on earning forex, a comprehensive strategy is required to tap the export opportunities of the manufactured goods, which Nepal imports from other countries like UK, UAE, Bangladesh, and Vietnam. Bihar has strong potential of exporting garments, packaged foods and jewelleries to Nepal,” said Siddharth.

A senior officer of the state finance department too supported the industries department’s demand saying that export of manufactured goods to Nepal could help Bihar make up for the revenue loss to the tune of Rs. 5000 crore incurred in 2017-18 on account of liquor ban and slump in taxes from sand mining activities

“The state faces a challenge to compensate the revenue loss of Rs 4000 crore which the excise department used to get as tax on liquor production,” he said.

The state suffered an estimated loss of another around Rs 1000 crore in 2017-18 following a ban on sand mining, officials said.

Production, sale and consumption of liquor products have been banned since April 2016. The government is finding it difficult to meet revenue collection target of Rs 34,000 crore for the current fiscal.

Citing declining share in imports of Indian goods last year, another senior officer of the industries department said the inter-ministerial panel could help the state conduct market survey in Nepal and identify the export possibilities for Bihar, which shares good relations with the people of the Himalayan republic.

Bihar shares a total 601 km of its border with Nepal and people on either sides of the border have family connections.